UNCOVERING WHY IT ROUTINELY OUTPERFORMS OTHER MARQUES’ OFFERINGS AT AUCTIONS
It has been more than a year since the headline-grabbing sale of Patek Philippe’s Henry Graves Jr Supercomplication at Sotheby’s, but the event remains a hot topic among watch connoisseurs. The 14 November 2014 auction in Geneva saw the circa-1933 pocket watch sell for SFr23 million (S$32 million), including buyer’s premium, to an anonymous buyer – the highest price paid for a timepiece. In fact, the majority of record-breaking timepieces sold under the hammer are from Patek Philippe. How are they able to command such premium prices at auction?
Kaz Fujimoto, director of Antiquorum’s Japanese branch, believes that there are three main reasons that can explain this phenomenon. “Number one, Patek has a great history,” he says. “They keep very good records that chart price movements. Two, they do everything themselves and have great marketing. Three, their designs don’t change much. They keep a classic style and produce low quantities.” Nicholas Biebuyck, a Hong Kong-based senior specialist at Bonhams, agrees. “Patek has a fantastic history which it knows how to leverage well for marketing and branding purposes,” he says. “It also carefully controls the number of significant pieces it offers to the market and who it is selling them to. This ensures that there is a limited supply and that second-hand prices remain high.” But good marketing, quality and low quantities don’t tell the whole story.
Many brands have as much, if not longer, histories than Patek Philippe, and also make great quality watches. The other half of the story, then, could be the brand’s reputation as a stalwart of the watch industry. Modern horology wouldn’t be the same had Jean Adrien Philippe, one of Patek Philippe’s founders, not invented the keyless winding and setting system in 1844, or the slipping spring in 1863, a device that protects mainsprings from becoming overly tense, and which remains a critical element of automatic watches. Being an independent, vertically integrated manufacture has been a tremendous asset, allowing the company to uphold the rigorous standards defined by the Patek Philippe Seal, which the company established in 2009 to replace the Geneva Seal.
CEO Thierry Stern, fourth-generation scion of the family-owned business, takes a hands-on approach in maintaining this standard. “The key to Patek’s success is the quality of the product,” he says. “We control every step of the process of fabrication. I’m very strict on (quality). Quite often I will refuse a dial. I may wipe out six months of someone’s life because the quality is not there. It’s very hard to explain to somebody that what they have spent the past six months doing is not at the level for Patek. But it is also my role to protect the standard I want to have for Patek.” This consistent quality has created a feedback loop: the timepieces attract a steady stream of buyers on the secondary market, which keeps prices aloft. This, in turn, fuels the perception that they are a worthwhile investment. “People have been keen to find alternative investments since the crash in 2008 and many found vintage Patek watches a safe place to put their money while still being able to enjoy it,” says Biebuyck.
What should collectors do to maintain the value of their Patek Philippes, then? “Using them and loving them is a good place to start as buyers would rather purchase something with an emotional attachment,” offers Biebuyck. “Following that, not polishing the piece too often and being careful not to get significant dents and scratches on the case will help preserve the original finishing of the watch. And finally, when the watch requires servicing, make sure to specify to Patek that the dial and hands should not be replaced without prior discussion.”
